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sudoku company issues 22,000 shares of $7 par value common stock in exchange for land and a building. the land is valued at $235,000 and the building at $367,000. prepare the journal entry to record issuance of the stock in exchange for the land and building. Record the issue of 21,000 shares of $6 par value common stock in exchange for land valued at $240,000 and a building valued at $362,000.

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Final answer:

The corrected journal entry for issuing 21,000 shares of $6 par value common stock in exchange for land and building includes debiting Land for $240,000, debiting Building for $362,000, crediting Common Stock for $126,000, and crediting Paid in Capital in Excess of Par Value for $476,000.

Step-by-step explanation:

To prepare the journal entry for the issuance of stock in exchange for land and a building, we need to recognize the assets received and the stock issued at their fair market values.

Initially, we have the company issuing 22,000 shares of $7 par value common stock for land valued at $235,000 and a building valued at $367,000. However, we then receive a correction, stipulating instead the issuance of 21,000 shares at a $6 par value for land valued at $240,000 and a building valued at $362,000. For this second transaction, the journal entry would be:

Debit Land $240,000

Debit Building $362,000

Credit Common Stock $126,000

Credit Paid in Capital in Excess of Par Value $476,000

To calculate the credits, we multiply the number of shares issued (21,000) by the par value per share ($6) to get the Common Stock value. The difference between the total value of land and building ($602,000) and the value of common stock ($126,000) is credited to Paid in Capital in Excess of Par Value.

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